Chapter A: Interpretation

Transcription

1 The translation is intended solely for the convenience of the reader. This translation has no legal status and although every effort has been made to ensure its accuracy, the Authority does not assume any responsibility whatsoever as to its accuracy and is not bound by its contents. Only the original Hebrew text is binding and reader is advised to consult the authoritative Hebrew text in all matters which may affect them. Order Prohibiting Money Laundering (Portfolio Managers' Duties of Identification, Reporting, and Management of Records to Prevent Money Laundering and Terror Financing) By the power vested in me under Section 7(b), 7(c), and 32(c) of the Prohibition on Money Laundering Law (hereinafter, "the Law"), and Section 48(a) of the Prohibition on Financing Terrorism Law (hereinafter, "the Prohibition on Financing Terrorism Law"); and after having consulted with the Minister of Public Security and the Minister of Justice; and, in the matter of Section 15, with the consent of the Minister of Justice and approval of the Knesset Constitution, Law, and Justice Committee; I hereby order as follows: Definitions 1. In this Order Chapter A: Interpretation "A Foreign Public Official" A foreign resident who holds a senior public office outside Israel, including a family member of said resident or a corporation controlled by or business partner of any of the above; In this matter, "senior public office" includes head of state, president of state, mayor, judge, member of parliament, member of government, and senior military or police officer, or any individual acting in such capacity yet whose title is different; "Family Member" as defined in the Securities Law ; 3 "Postal Bank" The company defined in the Postal Law (in this definition, "the Law") in its capacity as provider of monetary services, defined as having the same meaning as Section 1 of the Law, on behalf of the subsidiary, defined as having the same meaning as Section 88(k) of the Law; "Controlling owner" whoever has control of a corporation, as defined in Section 7(a)(1)(b) of the Law; "Recognized Body" a labor committee or representative of a condominium; "The Commissioner" as defined in Section 12 of the Law; 1 Sefer HaHukkim, 5760, p. 293; 5762, p Sefer HaHukkim 5765, p. 76 and Sefer HaHukkim 5728, p Sefer HaHukkim 5746, p. 79.

2 "The Competent Authority" as defined in Section 29 of the Law; "The List" A comprehensive list of declared terror organizations and declared active terrorists, published under Section 47(b)(1)(c) of the Prohibition of Terror Financing Law; and any said organization or individual, whereby the notice of the declaration thereof as a terrorist organization or active terrorist was furnished to a portfolio manager in a manner determined under Section 47(b)(1)(b) of the Prohibition of Terror Financing Law, and the portfolio manager received no cancellation notice thereof; "Managing Company," "Provident Fund" as defined in the Supervision of Financial Services (Provident Funds) Law ; 5 "Managed Account" An account comprising securities or financial assets in which the Portfolio Manager received a power of attorney to operate; "Individual" - Anyone other than a corporation, a public institution, a corporation established by statute outside Israel, and a Recognized Body; "Customer" Anyone who grants a power of attorney to a Portfolio Manager to operate in a securities or financial asset account; "Insurer as defined in the Supervision of Financial Services (Insurance) Law, Public Institution government ministries, JAFI (Jewish Agency for Israel), local authorities and other authorities, corporations or institutions established by statute in Israel. Identity Number any of the following: (1) For an individual who is a resident his identity number in the Population Registry; (2) For an individual who is a foreign resident the number of his passport or laissezpasser document and the name of the country in which such passport or laissezpasser document was issued; (3) For a corporation registered in Israel the registration number in the appropriate Registry; (4) For a corporation not registered in Israel the registration number in the country of incorporation, if any, and its name, and in the absence of records of corporations of its type the details recorded in the corporation s incorporation document; (5) For a public institution, Recognized Body, and corporation established by statute outside Israel the registration number allocated to it by the banking corporation or the Stock Exchange member where the Managed Account is administered, or the registration number allocated to it by the Portfolio Manager. 5 Sefer HaHukkim 5765, p Sefer HaHukkim 5741, p. 208.

3 Address any of the following: (1) For an individual his address as recorded in the document stated in Section 5(a)(1) and (2) or his place of residence, as he furnished, including the town name, street name, house number, and postal code, if such data exist, and for a foreign resident also including the country name; (2) For a corporation the address as recorded in the document stated in Section 5(a)(3) and (4) or the place where its business is conducted in Israel, and if it does not conduct any business in Israel the center of its business operations outside Israel, and all these as it furnished; the address shall include the town name, street name, house number, and postal code, if the data exist, and for a foreign corporation also including the country name; (3) For a foreign public institution, Recognized Body, and statutory corporation established outside Israel the address as furnished, including the town name, street name, house number, and post code, if the data exist, and for a corporation established by statute outside Israel also including the country name; Beneficiary as defined in Section 7(a)(1)(a) of the Law, and if a corporation, the corporation and its Controlling Owners are deemed Beneficiaries; Securities and Financial Assets as defined in the Regulation of Investment Advising, Investment Marketing and Investment Portfolio Management Law, (hereinafter, the Investment Law"); Transaction a single transaction, unless determined otherwise in this Order. Fund as defined in the Joint Investments in Trust Law, ; 8 "Name" - any of the following: (1) For an individual surname and first name as recorded in the identity document stated in Section 4; (2) For a corporation the registered name, and if incorporated in a country in which no registration of said type of corporation is maintained, the corporation's name as furnished; (3) For a corporation established by statute the name determined in the statute, either in or outside Israel; (4) For a Recognized Body and public institution, with the exception of a corporation established by statute their name as furnished; "Corporation any of the following: (1) A company, partnership, cooperative association, Ottoman association, charitable association, or political party registered in Israel; (2) A body registered as a corporation overseas; 7 Sefer HaHukkim 5755, p Sefer HaHukkim 5754, p. 308.

4 (3) A body incorporated in a country in which no registration is maintained of bodies of this type, provided that it furnishes a document attesting to its corporate status; Resident as defined in the Population Registry Law, ; 9 including an Israeli citizen who is not a resident as aforesaid, who is registered in the Population Registry; Foreign resident a person who is not a Resident. Customer Identification Procedure Chapter B: Duties of Identification 2. (a) A Portfolio Manager shall not enter into an engagement for the purpose of managing a Managed Account without identifying the person who applies to be a customer, and without conducting a CIP (Customer Identification Procedure), based on each customer's degree of risk of [engaging in] money laundering and terror financing; In this matter, CIP [entails], among other things, inquiry into the source of the money deposited in the Managed Account, [the customer's] occupation, and the purpose of opening the Managed Account; For foreign residents this includes an inquiry into the account owner's ties to Israel and whether he is a Foreign Public Official; For a business owner this includes his type of business. The Portfolio Manager shall document all the above details. (b) No Portfolio Manager shall enter into an engagement for the purpose of managing a Managed Account for a Foreign Public Official without approval from an officer of the Portfolio Manager, including individuals directly subordinate to the CEO. Such approval shall be considered according to the account owner's risk of [engaging in] money laundering and financing terrorism; If it emerges in the course of the engagement that the customer is a Foreign Public Official, the Portfolio Manager will desist from any transaction in the account until said approval to proceed is granted; In this Section, "officer" is as defined in the Companies Law (c) The Portfolio Manager shall regularly review the Know Your Customer procedure that he performed at the beginning of the engagement, according to the Customer's degree of risk of [engaging in] money laundering and financing terrorism, and shall revise his records accordingly. If any doubt arises regarding the customer's identity or the authenticity of the identifying documents in the Portfolio Manager's possession, the Portfolio Manager shall repeat the Know Your Customer procedure. Recording identifying information 3. (a) A Portfolio Manager shall not enter into an engagement for the purpose of managing a Managed Account without recording the following identifying 9 Sefer HaHukkim 5725, p Sefer HaHukkim 5759, p. 189.H

5 information regarding an applicant and his legal representative, if any, and verifying them as specified in Section 4: (1) Name; (2) Identity number; (3) For an individual date of birth and sex; for a corporation date of incorporation; (4) Address. (b) No Portfolio Manager shall enter into an engagement for the purpose of managing a Managed Account without recording the details stated in sub-sections (a)(1) and (2) for a Beneficiary; Details shall be recorded according to a declaration as stated in Section 5; If the Portfolio Manager fails to obtain the Beneficiary's identity number, after having taken reasonable steps to do so, the details stated in sub-section (a)(3) and the country of citizenship or incorporation, as the case may be, shall be recorded instead; This sub-section shall not apply - (1) If a Portfolio Manager discovers, in the course of the engagement, that the engagement involves a Managed Account on behalf of a Beneficiary, whose identity cannot be known based on the account applicant's declaration, and the reason that his identity is unknown is specified; In such an event, the Portfolio Manager will direct, in writing, the customer's attention to the customer's duty to furnish details of the Beneficiary to the Portfolio Manager immediately after becoming aware of his identity. (2) In the event of an application to open an account by a party appointed by a court, a religious court, the director of court execution, the Registrar of Estates, or any other official state body determined by the chairman of the Securities Authority, provided that he made a declaration to this effect the Portfolio Manager shall note the appointment in the account records and retain a copy of the document in support thereof. (c) No Portfolio Manager shall enter into an engagement with a corporation for the purpose of managing a Managed Account for a corporation without recording the details stated in sub-section (a)(1) and (2) for the Controlling Owners thereof; The details shall be recorded on the basis of the declaration stated in Section 5; In the event that the Portfolio Manager does not possess an identity number after having taken reasonable steps to obtain the same, the Portfolio Manager will instead specify the details in sub-section (a)(3) and the country of citizenship. (d) A Portfolio Manager shall not add following to any portfolio: 1( ) any client or legal representative of the customer, without recording the identifying details specified in sub-section (a) in regards thereof, and verifying them as specified in section (4);

6 (2) A beneficiary, without recording the identifying details specified in subsection (b); (3) A Controlling Owner of a corporation, without recording the identifying details specified in sub-section (c); (e) An engagement to manage a Managed Account and adding a client, joining a beneficiary, and joining a controlling owner shall be accompanied by a declaration as stated in Section 5; Said declaration made upon opening an account shall bear an original signature. Verification of details and demand of documents 4. (a) A Portfolio Manager shall verify the identifying details required for transactions as specified in Section 3(a) and (d)(1) and shall receive the following documents into his possession: (1) For the purpose of recording the identifying details specified in Section 3(a)(1) to (3) of an individual who is a Resident, the identity certificate or a certified copy thereof; the Portfolio Manager shall compare the identifying details with another official certificate issued by the State or one of its institutions, bearing a photograph and name or identity number; Photocopies of the identifying documents with all respects to the identifying details - shall be retained by the Portfolio Manager; If the applicant failed to furnish a second official certificate, the Portfolio Manager shall verify the identifying details with the Population Registry and shall compare the certificate's issue date to the most recent issue date recorded in the Population Registry in the Ministry of the Interior; A Portfolio Manager who is a Stock Exchange member or a affiliated corporation of a Stock Exchange member or a affiliated corporation of a banking corporation, may, instead of comparing the identifying details with another official document as aforesaid, compare them with the Population Registry, and compare the issue date on the certificate to the most recent issue date of such certificate recorded in the Population Registry in the Ministry of the Interior; The Portfolio Manager shall retain documentation of such comparison; For the purposes of this paragraph (a) "Affiliated corporation as defined in the Occupation Law; (b) A new immigrant certificate shall also be deemed an identifying document up to 30 days from its date of issue, and an Israeli passport shall also be so deemed when the identification is made outside Israel or when the person responsible for complying with the duties under Section 8 of the Law is convinced that the individual no longer permanently resides in Israel; The obligation to compare the certificate issue date shall not, however, apply to identification based on these documents;

7 (2) With respect to recording the identifying details stated in Section 3(a)(1) to (3) for an individual who is a foreign resident a foreign passport or laissez passer document, or certified copy of such document; The Portfolio Manager shall compare the identifying details with another document bearing a photograph and identity number, and in its absence with a document bearing a name or identity number and address or date of birth; The Portfolio Manager shall retain photocopies of the identifying documents with all respects related to the identifying details. (3) With respect to recording the identifying details of a corporation registered in Israel pursuant to Section 3(a)(1) to (3) the registration certificate or a certified copy thereof; If the certificate lacks any of the stated details an attorney's affirmation; The Portfolio Manager shall obtain and retain these documents or photocopies of them: (a) A certified copy of the corporation s registration certificate; (b) Certified copies of the corporation s foundation documents; (c) An attorney's affirmation of the corporation s existence, its name, and identity number; or, the Portfolio Manager shall verify the corporation s registration in the appropriate registries; (d) A certified copy of a resolution by the corporation's competent organ to open a Managed Account, or an attorney's affirmation that such a resolution was duly adopted; (e) A certified copy of a resolution by the corporation's competent organ regarding the authorized signatories in the account, or an attorney's affirmation of the authorized signatories in the account; ) 4( For the purpose of recording the identifying details of a corporation that is not registered in Israel, pursuant to Section 3(a)(1) to (4) a document attesting to its registration or a certified copy of such document, if such details appear in the document; If any of the aforesaid details are missing from the document an attorney's affirmation; The Portfolio Manager shall obtain a document attesting to the corporation's registration and documents as specified in Section (3)(b) to (e); For a corporation incorporated in a country in which no records of corporations of its type are maintained, the Portfolio Manager shall receive an attorney's affirmation that there is no registration in the country of incorporation, and the Portfolio Manager shall retain these documents or photocopies thereof; 5( ) For the purpose of recording the name of a public institution and of a corporation established by statute overseas a declaration by the customer, and for a corporation established by statute, the statute by virtue of which the corporation was established, or an attorney's affirmation of the existence of such statute; The Portfolio Manager shall receive the

8 documents specified in Section (3)(d) and (e), mutatis mutandis; The Portfolio Manager shall retain these documents or photocopies thereof; ) 6( For the purpose of registering the name and address of a Recognized Body the customer's declaration, after the Portfolio Manager has learned, from a document, that the individual wishing to enter into an engagement with him is authorized to act on behalf of the Recognized Body; The Portfolio Manager shall retain this document or a photocopy thereof; ) 7( For a minor under the age of 16 the identifying document of one of his guardians; The Portfolio Manager shall not perform any transaction initiated by the customer after the elapse of three months from the day the account holder reaches age 18, unless the provisions of paragraph (1) or (2) are satisfied, as applicable. (b) In this section, certified copy a true copy of the original certified by one of the following: (1) The authority that issued the original document. ) 2( An attorney licensed to practice law in Israel, a notary public who is an attorney from an OECD country, or a notary who is an attorney from the country that issued the document to be verified, provided that this country is not listed in the First Addendum; ) 3( An employee of the Portfolio Manager or an employee of a affiliated corporation, as defined in the Investment Law, listed in the Third Addendum of the Law, to whom the original document was shown; (4) An authority as stated in Article 6 of the Convention Abolishing the Requirement of Confirming Foreign Public Documents (hereinafter, "the Hague Convention Abolishing the Requirement of Legalization of Foreign Public Documents"); (5) An Israeli diplomatic or consular representative outside Israel. (c) A Portfolio Manager shall take reasonable measures with respect to the risk of money laundering and terror financing to verify the identifying details of any Beneficiary and Controlling Owner of an account as stated in Section 3(b)-(d), using relevant information or data received from a reliable source to his satisfaction; For this purpose, the Portfolio Manager may verify such identifying details with the Population Registry.

9 (d) Notwithstanding the provisions of this section, the chairman of the Securities Authority may, in consultation with the head of the Competent Authority, issue instructions for alternative methods of verifying details and document requirements. Affirmation of a Controlling Owner and a Beneficiary 5. (a) Before entering into an engagement to manage a Managed Account, the Portfolio Manager shall ask the candidate for a signed original affirmation of whether the account has a beneficiary; If the applicant affirms that the account has a beneficiary, the affirmation shall include the following details: (1) The details specified in Section 3(b) for each Beneficiary; If the Beneficiary is unknown, as stated in Section 3(b), the applicant shall declare accordingly; (2) An affirmation that the same details have also been furnished to the banking corporation or to the Stock Exchange member which administers the Managed Account. (b) Before entering into an engagement with a corporation, the Portfolio Manager shall demand an original signed declaration from the corporation or affirmation of an attorney of identifying details of the corporation's Controlling Owner as stated in Section 3(c). (c) The said declarations and affirmation stated in (a) and (b) shall be made according to the Form in the Second Addendum. Partial exemption 6. (a) The provisions of Sections 3(b), and (d)(2) and 5(a) regarding registration of a Beneficiary in a Managed Account, do not apply to (1) An account of a banking corporation, Postal Bank, an insurer, a member of the Stock Exchange, a provident fund, a managing company for the provident fund it manages, and an account on behalf of a trust; (2) A Managed Account of a public institution; (3) A Managed Account of a Recognized Body; (4) A Managed Account for a public religious trust registered in the Registry of Public Endowments; (5) An account for a Rabbinical public trust for which confirmation has been issued by the Rabbinical Court that it is a Rabbinical religious trust intended for public purposes, unless the Portfolio Manager receives notice from the Rabbinical Court that such confirmation has been voided;

10 (6) A Managed Account that is managed for community purposes for the benefit of a large or undefined group of beneficiaries, provided that affirmation thereof is issued by the person responsible for compliance with the duties pursuant to Section 8 of the Law; Opening such an account shall be subject to an declaration by the applicant, bearing an original signature, according to the form in the Second Addendum, affirming the special purpose of the account; (7) A Managed Account that is managed for community purposes for the benefit of a large or undefined group of beneficiaries, provided that the balance in the account does not exceed NIS 50,000; Opening such an account shall be subject to an declaration by the applicant, bearing an original signature, according to the form in the Second Addendum, affirming the special purpose of the account; (8) Any other type of account as instructed by the chairman of the Securities Authority. (b) If the customer no longer complies with any condition stated in sub-section (a)(6) to (8), a cautionary notice shall be sent to him; If the customer continues to operate in the account after such warning was sent, the Portfolio Manager shall not initiate any transaction in the account, unless the customer completes a declaration regarding a beneficiary pursuant to Section 5. (c) The provisions of sub-sections 3(c) and (d)(3) and 5(b) regarding registration of a Controlling Owner shall not apply to the Managed Accounts of a banking corporation, an insurer, a trust, a provident fund, a managing company for the provident fund under its management, or a company whose securities are traded on the Tel Aviv Stock Exchange or on a stock exchange of an OECD-member country, or to the account of any other type of corporation as instructed by the chairman of the Authority; In this section, stock exchange a securities exchange or a regulated market as defined in the Joint Investments in Trust Law, (d) If a company is controlled by any company as stated in sub-section (c), such company shall be deemed the Controlling Owner. Identification in Person 7. (a) A Portfolio Manager shall identify the customer and his legal representative in person according to the identifying documents specified in Section 4, before entering into an engagement involving a Managed Account as stated in Section 3; For this purpose, "in person identification" means identification by any of the following: (1) The Portfolio Manager or any of his employees; 11 Sefer Hahukkim, 5755, p. 308.

11 (2) An individual licensed to practice law in Israel; (3) An Israeli diplomatic or consular representative overseas; (4) An authority indicated in Article 6 of the Hague Convention Abolishing the Requirement of Legalization of Foreign Public Documents. (b) The Portfolio Manager shall record the details of the person who performed the identification. Retention of the identifying documents 8. The Portfolio Manager shall retain the identifying documents for a period of at least seven years following the termination of the engagement; The identifying documents, excluding declarations signed in the original, may be retained by means of computerized scan according to the conditions specified in Regulation 3a of the Evidence Regulations (Photographed Copies), ; 12 For this purpose, identifying documents any document furnished for the purposes of identification and verification, including a declaration issued under this Order and primary documents used by the Account Manager in the Know Your Customer procedure pursuant to Section 2. Audit of the Customer's Activity Chapter C: Duties of Auditing and Reporting 9. The Portfolio Manager shall conduct regular audits of the transactions in the Managed Account initiated by the Customer, insofar as he is aware of them, for the purpose of complying with his duty of identification, reporting, and maintaining records pursuant to the law; Without derogating from the generality of the foregoing, the Portfolio Manager shall: (1) Ensure that the transactions are consistent with the nature of the managed account based on his knowledge of the customer; (2) Perform a more intensive review of the transactions in a Managed Account of a Foreign Public Official. Reporting by the Portfolio Manager 10. (a) A Portfolio Manager shall report to the Competent Authority any transaction in a Managed Account, including attempted operation, which, in view of the information available to the Portfolio Manager, appears to be irregular. (b) Without detracting from the generality of the provisions of sub-section (a), any transaction specified in the Third Addendum may be deemed an irregular transaction. Exemption from reporting 12 Sefer Hahukkim, 5730, p. 308; 5765, p. 794.

12 11. The Portfolio Manager shall be exempt from reporting pursuant to this Order if the transaction is performed in a Managed Account by a customer who is one of the following: (1) A public institution; (2) A banking corporation; (3) The Postal Bank; (4) An insurer; (5) A stock exchange member; (6) A provident fund and a managing company for the provident fund it manages; (7) A trust. Reporting Details 12. Reporting pursuant to Section 10 shall include the following details: (1) Regarding the reported transaction: (a) The name of the banking corporation or stock exchange member who manages the customer's monetary account, the branch number, and account number; (b) The date the transaction was performed, as recorded in the Portfolio Manager s books; (c) The transaction amount in Israeli currency; For a transaction in foreign currency, the amount shall be calculated according to the representative exchange rate published by the Bank of Israel and known on the day the transaction is recorded; (d) Types of foreign currency in which the transaction was performed, up to two types of currency; (e)type of transaction; (f) Reason for reporting, including a description of the circumstances of the transaction for which the report is given. ) 2( For a client and an legal representative (a) Name; (b) Identity number; (c) Address; (d) Telephone number; up to two telephone numbers, if known;

13 (e) For an individual date of birth; For a corporation date of incorporation; (f) For an individual sex; (g) Customer status (resident/ foreign resident/ Israeli corporation/ foreign corporation. ) 3( For beneficiaries and controlling owners if any, the details required in Section 3(b) and (c). Reporting by a Portfolio Manager who is also a Stock Exchange Member 13. In addition to the provisions of Section 10, a Portfolio Manager who is also a Stock Exchange member shall also report to the Competent Authority pursuant to the Prohibition of Money Laundering Order (Duties of Identification, Reporting, And Maintaining Records by A Stock Exchange Member to Prevent Money Laundering and Terror Financing) Prohibition of disclosure and examination 14. Disclosure of the preparation, existence, non-existence or contents of any report pursuant to Section 10, and the existence of any supplementary report as defined in Section 31(c) of the Law, the existence of a request for such report or the contents of any of these, and also permission to peruse documents that attest to any of the above, are forbidden, except to an authorized person in the capacity of his role in the Portfolio Manager; the Commissioner, or anyone authorized by him; the Competent Authority, or pursuant to a Court order. Duty to check against the list Chapter D: Checking the Identifying Details against the List 15. The Portfolio Manager will check against the list to see whether it contains the name or identity number of any customer, legal representative, beneficiary, or controlling owner in any account he manages; Such an examination shall be performed whenever an organization or person is added to the list or whenever a customer, legal representative, Beneficiary or Controlling Owner is added to the account. Determining policy Chapter E: Miscellaneous 16. The Portfolio Manager shall determine the policy, tools, and risk management [methods] concerning the prohibition of money laundering and terror financing, in order to fulfill his duties concerning identification, reporting, and record maintenance pursuant to the Law, including on the following matters: 13 Kovetz Takanot, 5771, p. 194.

14 (1) The CIP procedure; (2) Tracking threats of money laundering and financing of terrorism, arising, inter alia, from new technologies, particularly those that enable transactions to be conducted other than face to face. Managing and retaining records 17. (a) The Portfolio Manager shall maintain a computer database of the numbers of the Managed Accounts he manages, and of all details required pursuant to this Order, including an indication of any items that have not been furnished despites requests to do so. (b) The Portfolio Manager shall retain all documents relating to a transaction: (1) initiated by the customer, for a period of seven years from the transaction date; (2) that has been reported to the Competent Authority and the report itself for a period of seven years from the transaction date. (c) The Portfolio Manager shall retain written documentation of examinations of transactions as aforesaid in sub-section (b) and their findings, for a period of seven years. Furnishing documents, information, and explanations 18. The Portfolio Manager shall submit, upon demand, documents, information, and explanations relating to compliance with his duties pursuant to this Order, to the Securities Authority or to an employee authorized by the Authority. Revocation 19. The Prohibition of Money Laundering Order (Duties of Identification, Reporting and Record Maintenance by a Portfolio Manager), , 14 excluding Section 18 therein, is revoked. Application 20. This Order enters into effect six months from its date of publication Transitional provisions 21. (a) After the elapse of two years from the initial application of this Order, a Portfolio Manager shall not perform any transaction in a Managed Account that was opened prior to the application of this Order, unless he has complied with the provisions of Section 2, according to his knowledge of the customer. (b) If the Portfolio Manager has used all the means at his disposal to establish contact with the customer and has failed to do so, he may, notwithstanding the 14 Kovetz Takanot 5762, p. 222; 5763, p. 932.

15 contents of sub-section (a) and until he succeeds in contacting the customer, perform in a Managed Account opened before the application of this Order, only the activities of buying and selling securities or financial assets, to ensure the customer's best interests, as long as it is not prohibited by any law; The Portfolio Manager shall record the details of any actions taken to establish contact with the customer and shall retain all documents relevant to such actions. First Addendum (Section 4(b)(2)) List of countries and territories 1. Any country or territory determined by the head of the Competent Authority, from the list of countries or territories for which the FATF has published reservations regarding their compliance with the organization s recommendations for prohibiting money laundering and the financing of terrorism. Such determination shall be published on the website of the Competent Authority. 2. Any country or territory as specified in paragraph )1( of the definition of Infiltrator in Section 1 of the Infiltration Prevention Law (Offenses and Jurisdiction), The following countries and territories: Iran, Algeria, Afghanistan, the Palestinian Authority, Libya, the United Arab Emirates, Malaysia, Morocco, Sudan, Somalia, Pakistan, Tunisia. 15 Seffer HaHukkim, 5714, p. 160;

16 Second Addendum Sections 5(c) and 6(a)(6) and (7( Beneficiary and Controlling Owner Affirmation Form I.. )full name of individual wishing to be a customer, and for a corporation name of the corporation), bearer of identity number., hereby declare that: I am acting solely for myself. There is a beneficiary of the aforesaid rights, but the details of his identity are not yet known. The reason for this:. I undertake to furnish the details of the beneficiary as soon as they become known to me. The beneficiaries of the transaction/ account is/are: Name Identity number Date of birth/ incorporation Sex The connection between me and any other/s listed above is :. The aforesaid details of the beneficiary of the account are the same details that I have furnished to the Banking Corporation/ Stock Exchange member where the account is administered. The aforesaid details of the beneficiary of the account are not the same details that I have furnished to the Banking Corporation/ Stock Exchange member where the account is administered. The reason for this is:. The account is managed for community purposes for the benefit of a large group or an undefined group of beneficiaries, and the balance of the account will not exceed NIS 50,000. The purpose of the account is:. The account is managed for community purposes for the benefit of a large group or an undefined group of beneficiaries (subject to approval by the person responsible for compliance with the duties pursuant to Section 8 of the Law). The purpose of the account is:. To be completed by a corporation:

17 There is no controlling owner of the corporation. The controlling owners of the corporation are: Name Identity number Date of birth/ incorporation Sex I undertake to inform the Portfolio Manager in writing as soon as possible of any change in the details given above. I acknowledge that giving false information, including failure to provide updates of any detail requiring reporting, with the intent of evading reporting or causing incorrect reporting pursuant to Section 7 of the Law, is a criminal offense. Date Signature Including the name of the country where the identity document was issued.

18 Third Addendum (Section 10(b)) List of transactions that may be deemed irregular transactions 1. Although this has not been declared by the account owner, there appears to be a beneficiary in the account under the circumstances, this includes a customer accompanied by another individual, and the Portfolio Manager has grounds to believe that the instructions issued by the customer originate with that individual. 2. Activity whose purpose appears to be to circumvent the duty of identification. 3. Activity that caused the Portfolio Manager to decide to terminate or refuse to enter into an engagement with the customer, based on considerations related to the prohibition of money laundering or prohibition of terror financing. 4. Activity that appears to be intended to replace the operations of an organization declared as an unlawful association pursuant to Regulation 84 of the Defense (Emergency) Regulations, 1945, 16 or an organization declared a terrorist organization pursuant to the Prevention of Terrorism Order, ; 17 or declared a terrorist organization pursuant to Section 2 of the Prohibition on Financing Terrorism Law. 5. Activity that appears to be intended to replace the activity of a person declared a terror activist pursuant to Section 2 of the Prohibition on Financing Terrorism Law. 6. Activity that appears to be devoid of any business or economic logic, with reference to the type of account or the customer's conduct, or that is not consistent with the purposes and objectives of the Managed Account. 7. Activity in the account involving the withdrawal of money and securities, without any apparent reason, soon after their deposit, and not as part of a normal course of business, as far as the Portfolio Manager knows. 8. Activity initiated in a Managed Account by a customer or legal representative, including changes in the needs and instructions and the extent of authority and discretion granted to the Portfolio Manager pursuant to the power of attorney, which is not typical of the customer or the type of account, without any apparent reason. 9. Irregular scope of activities or significant change in the account balance, without any apparent reason. 10. A sequence of instructions issued by the customer to purchase or sell securities, without any apparent reason. 11. Activity by a non- profit organization that, as far as the Portfolio Manager knows, is not consistent with the purposes of that organization s operations. 12. Activity in an account that was opened for a joint investment and appears to have been opened solely for managing a joint account, without any apparent reason. 13. The customer's engagement involves the management of several accounts of the same customer administered by various stock exchange members or banking corporations, as well as activity in more than one Managed Account, whether as a customer or as someone acting on the customer's behalf, without apparent reason. 16 Iton Rishmi, 1945, Addendum 2, p Iton Rishmi, 5708, Addendum A, p. 73.

19 14. A customer who has declared that he is acting in a Managed Account on behalf of another individual who is not known to him. 15. An initial transaction initiated by the customer after August 17, 2003, in a Managed Account opened before February 17, 2001, without the client being identified in person. 16. A lack of concern shown by the client with regard to the risks, commissions, and costs of the transactions. 17. An account managed for a public purpose, for which the applicant has declared that there are no beneficiaries. 18. Any declaration pursuant to this Order that appears to be incorrect. 19. Any declaration by a customer pursuant to Section 5 of this Order, in which the details given are not the same as the details given to the banking corporation or to the stock exchange member administering the Managed Account, as far as the Portfolio Manager knows. 8 Elul 5770 (August 18, 2010) Yuval Steinitz Minister of Finance